In CAE Inc. c. R. (“CAE”), the Tax Court of Canada ruled (affirmed by the Federal Court of Appeal) that a full-recourse, low-interest government loan (with other “non-commercial” terms) was “government assistance” within the meaning of that term in subsection 127(9) of the Income Tax Act (Canada) (the “Tax Act”). Consequently, the loan was included in income, and reduced scientific research and experimental development (SR&ED) expenditures and investment tax credits (ITC). On May 25, 2023, the Supreme Court of Canada dismissed CAE Inc.’s application for leave to appeal.
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